Need a loan for your international master’s degree? Whether you already have an admit or you’re expecting it any day now, you’ll need to work quickly to secure your study visa.
And, there’s no time to waste, so let’s dive in.
Where can I get an education loan for an MS degree in the US?
In principle, Indian students have 4 options to get an education loan to study abroad:
- Domestic banks.
- Non-banking financial companies (NBFCs).
- US banks.
- International lenders, like Prodigy Finance.
Each one offers different benefits and is worth a closer look.
Education loans from domestic banks
Domestic banks are typically the first place you’ll look for an education loan to study abroad. In India, for example, a few banks known for their overseas study loans. These include*:
- State Bank of India (SBI)
- HDFC Bank
- Punjab National Bank
- Bank of Baroda
- Axis Bank
- Oriental Bank of Commerce
In some countries, including India, you can get a foreign education loan from a domestic bank for the equivalent of USD 5600 without a guarantor. At the same banks, you might get a loan for up to USD 10,500 without security. But, you could expect a 15% margin money requirement on an education loan for abroad studies.
Loan size is often the biggest difference between domestic banks in countries like India. Some cap their student loans at the equivalent of USD 28K, some have an upper limit of USD 70K and a few have no upper limit if you can prove the funds are needed for your degree.
If you’re able to meet the requirements for security, guarantors, and margin money, consider loans from these providers as they may be the most cost-effective for your studies.
Getting an education loan for your MS in the USA involves a lot of paperwork. You should be aware that some universities in the US, such as MIT, require loan confirmation letters (which Indian banks call sanction letters) stating the loan amount in USD only. Before getting a loan for your higher education abroad, check whether this is a requirement for your university and whether your bank can provide the figures in USD, even if your loan is issued in a different currency.
Education loans from NBFCs (non-banking financial companies)
Non-banking financial companies (NBFCs) offer a local alternative to domestic banks. Using India as our example, you’ll find that popular NBFCs include*:
- Credila
- Avanse
Because these entities are governed differently than their banking counterparts, they offer higher loan amounts (up to the full cost of attendance) with low to zero margin money, providing an option for students that aren’t able to produce the 15% minimum margin money required by traditional banks.
Additionally, the processing speed of these loans is typically faster than traditional banks, making NBFCs solid options for students who need to prove financial capacity quickly.
An NBFC in India for education loans may require a guarantor or security for loans over a certain amount. You may find that the rules regarding who can co-sign or the type of security needed are more relaxed than traditional banks, but you may see a difference in interest rates as a result.
Don’t forget to double-check your school’s proof of funding requirements if your education loan is issued in a different currency.
Education loans from US-based lenders
Typically, American universities provide international students with a list of local loan providers. International students are often presented with higher interest rates on education loans for studying abroad compared to American citizens or permanent residents. However, US interest rates are usually lower than you’ll find in other parts of the world.
Education loans here often extend up to the full Cost of Attendance (CoA), and they’re given in USD, making it easy for universities to issue that all-important I-20 form.
There is one critical piece to this puzzle: you’ll need a US guarantor to get an education loan from a US bank. However, there aren’t any familial requirements as you would find in other countries; your guarantor can be a trusted friend or distant relative and doesn’t have to be a family member.
Finally, education loans in the US don’t require security or margin money.
Education loans from international lenders
International lenders are often non-banking financial companies (NBFCs) and loan amounts vary between lenders. You may find minimum loan amounts as well as caps on loan amounts, but many offer loans up to 100% of your Cost of Attendance. Margin money isn’t a requirement for international lenders, but you’ll still need to prove full-funding to your university and immigration officials.
International lenders seldom require security, though you may find a few that require a guarantor. Interest rates are typically competitive but vary based on the base rate lenders use, as well as your financial history.
One benefit you’ll find with international lenders is the almost universal ability to secure your loan in USD for American schools. For example, an education loan in the USA for Indian students will typically be provided in USD and not INR.
Prodigy Finance is one such international lender that saw the struggle students go through to fund their courses at global universities and set out to tackle this problem. That’s why our education loans directly address the concerns of international students. It wasn’t an easy problem to solve - but we found a way.
Want to know more about Prodigy Finance education loans?
Our customers study at the best global institutions and find work with some of the world’s biggest brands 3 to 6 months after graduation.
A Prodigy Finance education loan never requires security or guarantors and doesn’t use margin money. Plus, funds are sent directly to the university in USD - according to their due dates.
If you plan to take advantage of the OPT extension to remain in the US for work experience, you can repay your education loan easily through the Prodigy Finance app linked to your US bank account - and your education loan will help you build credit.
You can apply entirely online in just 30 minutes to see what rate you would qualify for.
Find out how you can fund your masters education all by yourself.
Prodigy Finance Ltd is authorised and regulated by the Financial Conduct Authority.
Post updated for accuracy and freshness on February 19, 2020. Originally published on December 6, 2019.
*As disclosed on the websites of each of these banking institutions and non-banking financial companies as at 6 December 2019.
Prodigy Finance representative example of Annual Percentage Rate:
- Loan size: USD 40,000
- Variable interest rate: 8.7% plus 3-month USD LIBOR (LIBOR varies over the duration of the loan). As of 1st January 2021, USD LIBOR is 0.2%
- Admin fee: 5%
- Duration: Repayment period of 10 years with a grace period of 6 months from the end of studies
- Total amount payable: USD 75,722
- Representative APR: 10% (APR FAQs)
- Monthly amount due: USD 631
What next? Find out more about Prodigy Finance’s education loans or check out the list of schools we support.
For any other information about Prodigy Finance, or our student loan process, required documents or other information like how to obtain credit report, feel free to check out or browse our site, or register for a webinar to have your questions answered by one of our team.